Supermarket chain cuts fuel prices

Supermarket chain Asda has lowered its petrol prices and said the reduction would last until at least the end of the August bank holiday weekend.

Asda is cutting 1p off a litre of petrol, which will now cost no more than 111.9p a litre at its 180 filling stations. The company is also knocking 2p a litre off diesel, which will now be no more than 114.9p a litre.

Rival Sainsbury's said that, from Wednesday, its fuel prices will be dropping "by up to 1p a litre on unleaded and up to 2p a litre on diesel in certain areas to ensure we continue to be competitively priced locally".

The company is also offering an additional 5p per litre off petrol when people spend £50 in its stores.

The reductions come as Asda's monthly income tracker showed family spending power was down 4.2% year on year, equating to a £7 fall in disposable income each week.

In addition, new research released by Asda will confirm that the outlook to the end of the year remains challenging.

The research shows UK families could face the lowest amount of disposable income in the final quarter of 2010 for two years.

Asda president and chief executive Andy Clarke said: "These are increasingly uncertain times for millions of families across the UK."